Hallador Energy pany(US:HNRG)2021-11-08 21:21Financial Performance - Q3 2021 net income was $8.0 million, with adjusted EBITDA of $20.5 million, reflecting strong operational performance [80] - Operating cash flow for Q3 was $24.1 million, with bank debt reduced by $15.2 million, resulting in a leverage ratio of 2.29X [81] - Cash provided by operations for the nine months ended September 30, 2021, was $37.0 million, up from $34.1 million in the same period of 2020 [93] - The company's interest expense decreased by approximately $4.7 million in the first nine months of 2021 compared to 2020, primarily due to a reduction in non-cash expenses from interest rate swap agreements and a declining bank debt balance [99] - The effective tax rate for the nine months ended September 30, 2021, is estimated at ~31%, down from ~69% in 2020, influenced by statutory depletion differences [104] - The company reported a basic and diluted earnings per share of $0.26 for the third quarter of 2021, compared to a loss of $(0.15) in the fourth quarter of 2020 [103] Sales and Production - During Q3 2021, the company shipped 2.04 million tons, with an average sales price of $38.71 per ton, the lowest of the year [81] - The company expects to ship 1.6 million tons in Q4 2021 at an average price of $41.40 per ton, projecting a total of 6.2 million tons for the full year [81] - In the first nine months of 2021, the company sold 4,619,000 tons at an average price of $38.86 per ton, compared to 4,355,000 tons at $40.68 per ton in the same period of 2020, reflecting a decrease in average price due to contract mix changes [96] - For the third quarter of 2021, the company sold 2,042,000 tons at an average price of $38.71 per ton, down from 1,585,000 tons at $40.85 per ton in the third quarter of 2020, attributed to contract mix changes [101] Operating Costs - Production costs in Q3 2021 were $33.15 per ton, a $2.95 increase from Q2 2021, attributed to longer travel times and supply chain disruptions [81] - Operating costs for all coal mines averaged $31.17 per ton for the nine months ended September 30, 2021, up from $30.03 per ton in 2020, exceeding prior guidance of $29-$30 per ton [97] - The average cost per ton for Oaktown was $29.17 for the first nine months of 2021, compared to $28.59 in 2020, indicating rising operational costs [97] - The company expects operating costs associated with the idled Prosperity mine to be $0.3 million for the remainder of 2021, with prior costs of $0.8 million during the nine months ended September 30, 2021 [97] Market Outlook - The company anticipates higher average sales prices for 2022 compared to 2021, supported by strong coal demand [81] - The coal market shows signs of improvement, with significant increases in gas prices and coal export prices [88] Employee and Administrative Costs - General and administrative expenses increased by $0.5 million in the first nine months of 2021 compared to 2020, mainly due to additional legal fees for development projects, with an expected G&A of approximately $3.2 million for the remainder of 2021 [98] - The total number of employees and contractors at Sunrise Coal increased to 727 as of September 30, 2021, from 658 in the same period of 2020 [100] Coal Operating Margins - Operating margins from coal decreased by $10.8 million in the first nine months of 2021 compared to the same period in 2020, with margins at $7.70 per ton [93] Renewable Energy Development - The company plans to develop up to 1000 MW of renewable power, with 200 MW from solar and battery storage expected by 2025 [89]